Main Event Entertainment Group Limited’s CEO Solomon Sharpe, and chairman Ian Blair have indicated the company is considering “modified “ business models and cost containment as major strategies going into the company’s new financial year.
They stated, “we are actively seeking to innovate and take advantage of scarce revenue opportunities,” in remarks attached to the financials for the period ended October 31.
The directors said the financial performance in the second half of the year reflects the brunt of the impact of the containment measures exercised under the spread of COVID-19.
“The company has since been confronted with unprecedented reductions in business activity. This has had a major impact on revenues, and in turn, net earnings for the financial year.”
Revenues contracted 42 per cent and the company closed out the period with a loss of (18.23 million, down 115 per cent from net profit of $ 97.34 million made at year end October 2019.
Revenues of $1.05 billion compared to $1.8 billion in the prior year, with 85 per cent of the revenues for the year booked during the first half year, management said.
The directors stated, “We are grateful and take some solace to have achieved revenues of over $1 billion in this current climate.”
They said that faced with declining revenues, they took quick and effective actions to ease the impact to cash flows and profitability.
“We moved aggressively to reduce operating costs, with all cost categories under continuous review.”
Administrative and general expenses for the year total $484.81 million; down 27 per cent from the $667.05 million recorded at the end of the prior year.
Total administrative and general expenses represent 46 per cent of revenues, compared to 37 per cent of revenues in 2019. Operating profit for the year of $5.01 million compares to $120.01 million last year; and net loss of $18.23 million compares to net income of $97.34 million in 2019.
Given new accounting rules, depreciation, and amortisation charges total $148.34 million or 31 per cent of the total expenses for the year.
This compares to $116.91 million or 18 per cent of total expenses in 2019.
Additionally, finance costs of $23.47 million for the current year includes $7.55 million re-classified (from rent) to lease related finance charges.
The directors note that on the balance sheet, the company has “maintained a good asset base, despite suspending capital expenditure for much of the second half of the year and continuing depreciation throughout.”
Total assets of $854.12 million represent a 17 per cent decline from $1 billion at the end of the 2019 year.
Receivables decline of $198.83 million or 74 per cent was attributed to lower revenues in the second half; paired with strong collection efforts.
Management said, “With these efforts, cash and cash equivalents has increased by $64.84 million or 96 per cent ; and cash flows from operations showed improvements for a second year; growing by 22 per cent to $243.61 million from $199.8 million.”
Shareholder’s equity has declined by $45.23 million or eight per cent in the current year. This decrease reverses a seven per cent gain in the prior year; and includes a cash dividend of $27.1 million paid to shareholders during the current fiscal year.